Crumbs loss nears $1 million in third quarter

NEW YORK — Crumbs Bake Shop, Inc., the largest U.S.-based cupcake specialty store, sustained a loss of $914,000 in the third quarter ended Sept. 30, which compared with a loss of $40,000 in the same period a year ago. Net sales, meanwhile, rose 18% to $8,876,000 from $7,506,000.

“Although we were disappointed with our third-quarter results, we are taking definitive action to improve performance,” said Jason Bauer, co-founder of Crumbs. “To that point, I am very excited that Julian R. Geiger has agreed to become our new president and chief executive officer, given his extensive experience building brands and fostering growth. I believe that his leadership will be an important ingredient in Crumbs’ development and I look forward to working closely with him in building the business over time.”

Crumbs said cost of sales increased 23% during the third quarter, to $3,768,000 from $3,062,000, and as a percentage of sales, increased 1.7 percentage points to 42.5%. Gross profit increased nearly 15% to $5,108,000 from $4,444,000.

During the third quarter, Crumbs said it opened four stores in New York and Illinois and ended its third quarter with a top of 39 stores opened across six states and the District of Columbia. The company said it expects to open stores in new markets such as Boston and Philadelphia during 2012.

For the nine months ended Sept. 30, Crumbs sustained a loss of $1,170,000, which compared with earnings of $932,000, equal to 29c per share on the common stock, in the same period of fiscal 2010. Net sales totaled $28,889,000, up 28% from $22,546,000.